The head of Sweden’s Moderate Party, Ulf Kristersson, said on Wednesday he would begin work on forming a new government after Prime Minister Magdalena Andersson admitted her Social Democrats had lost the weekend general election. The moderates, Sweden Democrats, Christian Democrats and Liberals look set to take 176 seats in the 349-seat parliament to the center-left’s 173 seats, according to the latest figures from the electoral authority. A few votes remain to be counted, but the result is unlikely to change significantly. “I will now begin the task of forming a new government that can get things done,” Mr Kristersson said in a video on his Instagram account. The election marks a watershed in Swedish politics with the anti-immigration Sweden Democrats, a party with roots on the fringes of white supremacy, on the verge of gaining influence in government policy. The success of the party, which took over from Mr Kristersson’s moderates as the country’s second largest, has raised fears that Sweden’s tolerant and inclusive politics are a thing of the past. However, their mantra that Sweden’s woes – especially gang crime – are the result of decades of excessive immigration policies has struck a chord with many voters. Mr Kristersson said he would build a government “for all of Sweden and all citizens”. “There is a lot of frustration in society, fear of violence, concern about the economy, the world is very uncertain and the political polarization has become very big in Sweden as well,” he said. “Therefore, my message is that I want us to unite, not divide.” Although Mr Kristersson’s party is smaller, Sweden Democrat leader Jimmie Akesson cannot get the broad support from the right needed to oust the Social Democrats. Mr Kristersson is likely to try to form a government with the Christian Democrats and rely on support in parliament from the Sweden Democrats and Liberals. Prime Minister Andersson accepted the defeat, but warned that many Swedes were worried about the electoral success of the Sweden Democrats. “I see your concern and share it,” he said. The Sweden Democrats aim to make Sweden the toughest immigration policy in the European Union, including legislation that would allow people seeking asylum on religious or LGBTQ grounds to be refused. The party wants to cut economic benefits for immigrants and give more powers to the police, including zones in troubled areas that allow searches without specific suspicion of crime. The Sweden Democrats look set to win 20.6 percent of the vote, compared to the moderates’ 19.1 percent. The Social Democrats will be at 30.4%. With only a slim majority, Mr Kristersson faces a number of challenges, not the least of which is the fact that his party is at the bottom. Forming an administration and agreeing on a budget will not be easy, as the Liberals and Sweden Democrats refuse to serve together – or separately – in government and differ on many policies. “Sweden will now have a government that is only one or two seats away from a government crisis,” Ms Andersson said. She said her door was open to Mr Kristersson if he wanted to reconsider his alliance with the Sweden Democrats. In addition, Sweden is in the midst of a cost of living crisis and may be headed for recession next year. Russia’s war in Ukraine has destabilized the Baltic region – on Sweden’s doorstep – and uncertainty remains over whether Turkey will ultimately agree to Stockholm’s application to join NATO. Measures to tackle climate change and long-term energy policy must also be scrapped, while the holes in the welfare system exposed by the pandemic must be patched and a planned increase in defense spending funded. The result is yet to be officially confirmed, probably by the weekend.